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March 2018 FinTech Funding – Lending, Neobanks Topped the Charts

In March 2018, FinTech startups around the world raised $3.49 billion worth of VC investments across 137 deals. This was a whopping 75.6% YoY growth in the total funding raised compared to March 2017. In terms of MoM growth, in March 2018, the global FinTech funding value grew by a staggering 150% from the $1.4 billion raised in February 2018.

The US continued to dominate the funding charts with $2.01 billion, which was 57.5% of the global FinTech funding in March. The UK was a distant second with a 11.6% ($405.2 million) contribution, with Germany, China, and India contributing 7.2% ($252.7 million), 5.3% ($184.2 million) and 3.6% ($125.1 million) respectively.

Lending startups led the funding race in March 2018 with $806.2 million in funding across 18 deals, with key startups such as Credit Karma (Credit scoring, $500M), Mighty ($105M), and Oodle Car Finance ($100M) raising big funds. There was a staggering 202% MoM growth in the funding in this space from February 2018. US-based lending startups raised 97% of the global funding.

The most interesting development in the previous month was the emergence of neo-banks in the funding race. Ranked second in terms of FinTech segments with the highest funding in March, startups in the neo-banking space raised $586.7M across five high-value deals across the globe, with the leading players such as N26 ($160M) and Atom Bank ($207M) wooing the investors and raising some large deals. What was the most interesting is the fact that $586.7 million was raised across just four large deals, with Solaris Bank ($69.7 million) and Brazil’s NuBank ($150 million) being the other two players who raised funding.

Investment Platforms ($549.5M) and InsurTech ($410M) were the other two segments which raised over $400M of funding. In the Investment Platforms segment, there were two large deals raised by Robinhood ($350 million) and eToro ($100 million). Investment Platforms saw the highest MoM growth this month (319%) compared to Feb. 2018. InsurTech, which topped the charts in Feb, saw 44% MoM growth this month with companies such as Oscar ($165 million), Root Insurance ($51 million), and Atomwise ($45 million) raising large funds.

The payments segment which stood third in terms of funding in February, was comparatively low-funded this month with $158.5M raised across 10 deals. In terms of MoM growth, Payments saw a 19% decline in the total funding in March, as compared to February. Payment companies such as Pine Labs ($82M) and Stripe ($38 M) raised a good amount of funding.

The other two segments which garnered significant attention from investors in March were AI/ML and Security, Fraud & Authentication. The startups in the AI/ML space raised $218.5 million across five deals, with a 114% of MoM growth from February. China-based WeCash raised a large deal in this space, with $160 million in funding. In the Security, Fraud & Authentication space, the startups raised $211.9 million across 16 deals, with a 152% MoM growth from February. Sift Science ($53M), Netsparker ($40M), and BioCatch ($30M) were some of the companies in this space who raised a good amount of funds in March 2018.

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